The more time I spend talking to people about microbusinesses and their various incarnations, the more I am becoming convinced that policy makers really have no idea what's going on out here.

In a lot of ways, that's not really their fault. I've said on more than one occasion that it's difficult to keep your feet planted in the real world when you have to work inside a bubble.

This week's sad saga of the S corporation is a very good example.

Given the fact that there are a large number of micro-corporations out there — incorporated nonemployer businesses number in excess of five million, all by themselves — why isn't anybody asking which things about the corporate structure are working for them and which ones aren't?

Of course, the biggest concern for policy makers is that the S corporation should be a tool that small businesses can use to grow.

But what about the micro-corporations that grow — or whose owners want them to grow — but not necessarily in the way either lawmakers or policy makers are used to watching businesses grow?

Everything has context and context matters. A drop of water behaves in a certain way when it is surrounded by its fellows, adrift in an ocean. It behaves very differently when it is alone in the sand.

And that means, if you want to do something to that drop of water — say, raise its temperature by ten degrees — you would have to take that context into account. Otherwise, you might be successful in one case and spectacularly unsuccessful in the other.

Microbusiness owners are quite adept at playing the hand that they are dealt. They work within the context of the rules and laws and regulations as they are, and create the businesses and the lives they want from those raw materials.

But just because we use them does not mean they work as well for us as they could. And nobody is going to be able to do anything about that for as long as they fail to notice the context that is us.